Exclusive: “Competition in law is fierce but not working for consumers”

The fact that there is a lot of competition in the legal market does not mean it is working well for consumers, the chair of the Legal Services Consumers Panel says in her first interview.

Speaking to Legal Futures, Sarah Chambers also makes clear that getting firms to publish the number of complaints they receive is also on her agenda.

Ms Chambers took up her three-year appointment in May. She is paid £15,000 for at least 30 days of work a year.

She knows a thing or two about how competition is meant to work, it’s fair to say.

She was chief executive of post regulator PostComm from 2004 to 2008, before becoming director of consumer & competition policy at the Department of Business, Innovation and Skills until 2011, and then director of renewable energy deployment at the Department of Energy and Climate Change until 2013.

Until recently, she was a non-executive director of the Competition & Markets Authority (CMA), which in late 2016 issued a report on the legal services market, although she was not closely involved with that project.

The Legal Services Consumer Panel may be small – it shares the offices of the Legal Services Board and its eight-strong board is supported by just two members of staff – but it often finds itself in the crosshairs of lawyers, who generally accuse it of simply not understanding what they do and how they do it.

Ms Chambers drily acknowledges a “lack of understanding” among lawyers about why the panel is needed.

Arguably some of this criticism is defensive, as it is the panel that drove the transparency agenda which saw the CMA’s call for lawyers to publish prices and service quality indicators and now the various regulators change their rules to make this a reality.

The key argument for the transparency push is that it will improve competition in the legal market by making it easier for consumers to shop around.

But any lawyer in the land will say they face no shortage of competition. Ms Chambers replies: “Where you’ve got a market that is very highly regulated in one way but where there can be limits to the information that is available to the consumers, it doesn’t follow that the competition is fair and open, and that the consumers of legal services are the ones benefiting from the competition.

“That’s why we go on and on about transparency in prices, in quality data, complaints – there should be much more information out there so that users of legal services have the information they need to make an informed choice.”

So consumers do not know how to make the best of the choice they have. But despite this, the panel’s own annual tracker survey showed very high levels of consumer satisfaction with lawyers. So, is this a solution looking for a problem?

“I don’t think so,” she says. “We should celebrate the fact that most people who use – and are lucky enough to be able to afford to use – legal services are satisfied with how they’ve been dealt with, but that shouldn’t stop us from saying ‘But a lot of people don’t use them in the first place because they can’t find out how to use them or they think they’re too expensive’.

“The two things are not inconsistent.”

Ms Chambers stresses that the CMA was not concerned by a lack of competition, but rather whether the market was working well for consumers. “It’s not a numbers game… It’s about whether competition in the market – which is pretty fierce in many respects – is actually working for its users in the way we would like it to. A lot of that is about information, access and all the rest of it.”

Lawyers can nonetheless feel they are being unfairly singled out when other professions and trades are not facing the same requirements. Ms Chambers points out simply that the CMA had received “a lot” of complaints about lawyers when it decided to intervene.

One of the dangers of the new regime is that it puts too much focus on price. Ms Chambers recognises this and says the focus over the next year will be on quality indicators.

She says: “Price has come first because it’s probably easier to pin down. Price is an indicator but not particularly a great indicator. It’s certainly not an indicator of quality…

“For a lot of customers, what it’s going to cost really matters but it matters at least as much that you’re going to get a quality service.”

The SRA had originally intended to make firms publish details about the number of complaints they received, but the response to its consultation prompted a rethink and this was dropped, because of the difficulty of putting such figures, which are generally very low, into context.

Undoubtedly complaints – including those resolved internally by the firm – are a useful business tool, but that is a long way from mandating firms to publish their number.

“They’ve done that in the NHS and you could say there are similar difficulties for GPs, for example,” Ms Chambers responds. “Most GPs, for the number of people they see every day, don’t get many complaints but they do get complaints and most of them are quite complicated as well. But they have managed to find a way to get those collated and published in a way that patients, other users and third parties who deal with the health service have found very useful.

“So there are things that can be learnt from other sectors and perhaps adapted to use in the legal services market. I don’t think we should give up on this one.”

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